Independent Conn. Senate Candidate Warren Mosler Signs Pledge to Vote Against Any Cuts in Social Security or Medicare
In: Announcements
Middletown, Conn. (June, 2010) –Warren Mosler, a leading voice in the fight against the Congressional bipartisan move to slash Social Security and Medicare, has signed a University of Missouri Kansas City (UMKC) economics department pledge to never vote for any reductions in Social Security or Medicare benefits, or any delays in eligibility.
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Mainstream economics claims that full employment brings inflation, and some unemployment (often called ‘natural’) is inevitable. During bad times, like today, unemployment rises significantly from its ‘natural’ level and bites even more harshly. We at Mecpoc believe that full employment should be the primary target of economic policy. As our chosen topic of exploration, we set out to ask Franklin students for their opinion on unemployment and the implications their major has taught them. Here include extracts of the responses from three Franklin College students: Caitlin Morris (Comparative Literature and Culture Studies major), William Turner (International Relations major), and James Jasper (History major).
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When is Government-Issued Debt Safe? If You Think This is Only True When Debt is Below Some Threshold You May be Dead Wrong
In: Flash Cards
This story began in earnest back in the early 1990’s when Italian government bonds denominated in lira yielded about 2% more than the cost of borrowing the lira from the banks. One could buy Italian securities at about 14%, and borrow the lira to pay for them at about 12% for the term of the securities. This was a free lunch of 2% apart from one thing- the perceived risk of default by the Italian government. Professor Rudi Dornbusch, an influential academic economist, was insisting Italy was on the verge of default because of their debt to GDP ratio exceeded 110% and the lira interest rate was higher than the Italian growth rate. This situation caught my attention as there was easy money to be made if one knew for sure the Italian government wouldn’t default.
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The Fed is the Monopoly Supplier of Net Reserves to its Banking System; Therefore, has no Option But to Set at Least One Interest Rate
In: Flash Cards
Explanation why: The reserves of the banking system exist in only one single form: deposits at the Fed. Banks ‘own money’ when they own a deposit at the Fed. Banks make payments by transferring their credits. Read the rest of this entry »
In the Banking System, the Causation Runs From Loans to Deposits, That is: ‘Loans Create Deposits’.
In: Flash Cards
Explanation why: When a bank agrees in making a new loan, it credits the agreed amount on a bank account. The only constraint for the bank is when the borrower spends the loaned amount; it will have to clear the payments using reserves at the Fed. Read the rest of this entry »
Operationally, Government Spending is Not Inherently Revenue Constrained. Any such Constraints Are Necessarily Self-Imposed
In: Flash Cards
Explanation why: The government spends by writing checks on the US Treasury General Account at the Fed. When the check is deposited by the private recipient, the check is cleared directly with the Fed that debits the account of the US Treasury and credits the reserves of the bank that has cleared the check. Read the rest of this entry »
Explanation why: Taxes are liabilities that the state has the authority to impose on private sector’s balance sheets. It is a unilateral transaction driven by a hierarchy relation (not by contractual arrangements). At the moment a new tax is approved (and before it is paid), the net worth of the private sector is reduced.
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- Tags: Treasury
Warren Mosler’s appearance on CNBC has started a controversial debate in the midst of the fiscal crisis of Greece.
It all boils down to understanding monetary operations:
- An ECB distribution to European States entails no issuing of debt;
- Taxing functions to regulate demand, it does not actually collect revenue;
- When China buys US Treasury securities, it makes no specific resource available to the United States: just moving a credit entry from one account to another;
And if you think: “oh, this is ridiculous, it just can’t be so easy!” think again and seek some answers on this website.
Please click here to watch the video footage of Warren Mosler on CNBC on 11 February 2010.
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- Tags: CNBC, Warren Mosler
By: Warren Mosler
Aiming at public purpose while reducing government discretionary power, increasing spending power, fixing the banking system, restoring states’ budgets, keeping inflation in check, achieving full employment, easing tensions in the mortgage market, and ensuring sufficient liquidity at all times.
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- Tags: Banking, FDIC, Mosler, Treasury, US Economy
Franklin College Switzerland is hosting the 3rd Mecpoc Symposium sponsored by the Mosler Economic Policy Center.
When: Tuesday April 20, 2010
Where: Franklin Auditorium
To view the program, click here.
- Independent Conn. Senate Candidate Warren Mosler Signs Pledge to Vote Against Any Cuts in Social Security or Medicare
- Views on Unemployment
- When is Government-Issued Debt Safe? If You Think This is Only True When Debt is Below Some Threshold You May be Dead Wrong
- The Fed is the Monopoly Supplier of Net Reserves to its Banking System; Therefore, has no Option But to Set at Least One Interest Rate
- In the Banking System, the Causation Runs From Loans to Deposits, That is: ‘Loans Create Deposits’.
- Operationally, Government Spending is Not Inherently Revenue Constrained. Any such Constraints Are Necessarily Self-Imposed
- Government $ Deficit = Non Government $ Surplus (Net Financial Assets)
- Warren Mosler on CNBC
- How to Fix the US Economy in Less Than 500 Words
- 2010 Mecpoc Symposium
- Mosler Summer Scholarship 2010
- What Will Change the Total Amount of Bank Deposits Held by the (Non-Bank) Private Sector?
- Does a Change in Our Spending Decisions Affect the Total Amount of Bank Deposits?
- Interview with Paul Davidson, Regarding the Crisis
- 2nd Mecpoc Symposium
- More Savings, Yet Less Business Finance: Why?
- Unemployment and Pro-War Sentiments?
- Why It's You and Me Deciding the Amount of Banknotes in Circulation
- Wars Waste Resources, So Does Unemployment
- Mosler Summer Scholarship 2009
- John: Mr. Mosler - I understand and agree with your explanation of the U.S. monetary system. I also agree [...]
- Zachary Levy: "And without a switch to a command type economy, it’s impossible to have complete full employment. [...]
- warren mosler: The Russian default was a typical fixed exchange rate blowup. The ruble was fixed at 6.45 to the [...]
- Robert Searle: I think when we are talking about banks, and money we are actually discussing ELECTRONIC DATA. T [...]
- Jonathan Stanford: Was the foreign USD debt burden enough to bring Russia to insolvency during the 1998 crisis? Because [...]
